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Facing Facts Alert 7

Number 7, September 8, 1995

Facing Facts Alert 7

FACING FACTS
The Truth about Entitlements and the Budget
A Fax Alert from The Concord Coalition
FAX ALERT (Number 7, September 8, 1995)
PUBLIC REJECTS ENTITLEMENTS STATUS QUO
The Senior lobby is circulating polls which, as usual, show the public
monolithically opposed to cuts in Social Security and Medicare.
These surveys misrepresent the true state of public opinion. Without
any mention of why Congress is debating cuts, they ask people whether
they favor yanking something away from senior citizens -- then record
the knee-jerk "no." They imply that the only choice voters have is
between doing nothing and abolishing popular programs. And they lard
their questions with language about breaking "deals" and "commitments."
Understandably, the public's response to such surveys gives the
impression it is deeply wedded to the status quo.
Reformers take heart. Many polls, including a recent Concord Coalition
survey, show that the public is deeply troubled by the status quo --
and much more receptive to reform than the senior lobby wants you to
think.*
The share of the public which is "confident" in Social Security and
Medicare is sinking like a stone and now stands around one-third in
most surveys. Only one out of ten Baby Boomers believe the government
will be able to keep its financial promises to their generation. More
young adults aged 18-to-24 believe in UFOs than think they will ever
collect Social Security.
The public understands that fundamental economic and demographic trends
are the cause of Social Security's and Medicare's bleak financial
outlook. In fact, an amazing 93 percent of the public agrees that the
projected decline in the ratio of workers to retirees is a very serious
or somewhat serious problem.
The public believes that averting a crisis tomorrow requires action on
entitlements today. Asked whether "major reform" of Social Security and
Medicare "is needed now" or whether it can await future developments,
78 percent of the public say "now."
The more the public knows about the relative size of entitlement
programs, the more it is willing to cut their projected growth. When
respondents to Concord's poll learned the current and projected budget
share of Medicare, Social Security, and interest on the national debt,
the percentage willing to make cost-saving reforms jumped from roughly
one-third to roughly two-thirds.
The public becomes even more willing to make cuts when it learns that
reforms can be means-tested. According to Concord's poll, 67 percent
of the public would support reductions in Social Security benefits to
higher-income households; 77 percent would support such reductions in
Medicare benefits. Other surveys have found equally impressive support
for means-testing. According to a 1994 poll sponsored by the National
Taxpayers Union and the Congressional Institute for the Future, 62
percent of the public favors a comprehensive means-test for federal
entitlements. According to a 1995 CNN poll, 73 percent of the public
believes that Social Security and Medicare benefits should be reduced
to households with incomes over $50,000; among those opposed, 49
percent are in favor of reducing benefits to households with incomes
over $100,000. These favorable ratings are higher than those the public
accords virtually every other approach to entitlement reformufrom
hiking retirement ages to cutting COLAs to raising payroll taxes.
None of this is to say that the public is not still ambivalent about
cutting entitlements. The conventional wisdom about the "third rail"
of American politics, however, is outdated. Yes, if asked out of the
blue whether they want to shut down large and popular benefit programs
for no apparent reason, most Americans will say "no." But the public
is not necessarily wed to a "deal" that promises they will collect
whatever they're "entitled to" under current lawuno matter what the
consequences. Indeed, when the need for gradual yet fundamental reform
is explained, and when the reform is perceived to be fair, the public's
response is favorable.
*All polling data cited below are from recent public opinion surveys
sponsored by The Concord Coalition, the National Taxpayers Union and
the Congressional Institute for the Future, Merrill Lynch, CNN, and
Third Millennium.